Mad cow disease fears lead to layoffs at beef plant

January 11, 2004

By Darrell Todd Maurina

Company officials announced Friday that the Excel beef processing plants in Friona and Plainview will lay off about 100 to 150 people at each plant.
The layoffs are due to bovine spongiform encephalitis, also known as “mad cow disease,” according to Bill Rupp, executive vice president of Excel.
“A number of countries have banned U.S. beef, and there are some products we will not now be processing for export,” said Rupp. “That has led to the layoffs.”
In a corporate press release, Rupp said the company will follow the layoff and employee recall procedures as outlined in the respective collective bargaining agreements, but hopes there will be no more layoffs. Facilities in Kansas, Nebraska and Colorado are also affected.
Local plant officials and corporate officials in Wichita could not be reached for further comment. Each beef processing facility employs between 2,200 and 2,500 people, the press release states.
The layoffs don’t bode well for the local beef industry, according to area beef producers and sellers.
Pat Woods, president of the Curry County Farm and Livestock Bureau and a member of the national Cattlemen’s Beef Board, agreed that the key problem is the ban on American beef by many foreign countries.
“The main thing is all that beef sitting out on the ocean. Our domestic demand is awfully good, but 20 percent of our product is not getting moved,” Woods said.
A related problem is that some parts of the animal are typically sold to foreign countries, not American consumers, and the value is reduced when those products aren’t being sold as meat for human consumption due to a lack of domestic demand.
“You’ve heard of menudo — that’s made out of the stomach and intestine, and that’s usually exported to other countries,” Woods said.
Charles Rogers, owner of the Clovis Livestock Auction, said he regretted that the drop in cattle prices came at a time when prices were just going up again after a long period of low prices.
“For the past six months the ranchers and farmers in this area were having an opportunity to recover some of their losses from previous years,” Rogers said. “The prices were not down as drastically as they could have been, but we had a definite downturn in the market.”
Rogers said so far the main impact of mad cow has been on prices of cattle ready for slaughter, but that price dip could rapidly affect the rest of the market.
“Something really important that has been left out is the cattle on the feedlot that are waiting for slaughter are $20 per hundredweight cheaper,” Rogers said. “If that price does not improve quickly, we will see that prices on all the rest of the classes of cattle, from the prices the ranchers receive to the prices that everybody else receives, will drop.”
Rogers said the Excel layoff is a bad sign that those low prices may continue.
“The prices will probably not return to the levels they were at before the mad cow fiasco, I would estimate, within a minimum of six to eight months,” Rogers said.
The situation caused by the diagnosis of mad cow disease in only one cow on one farm has been a source of frustration for the beef industry, Rogers said.
“It’s been blown totally out of proportion by the press,” Rogers said. “Just a few years ago, a study was done that 71 percent of the chicken you buy in the grocery store has salmonella poisoning and if you don’t prepare it right, you will get that disease.
“I would think that would be a lot more important to public safety.”
The Associated Press contributed to this report.